TackerDad 
Member since May 17, 2012


Stats

Friends

  • No friends yet.
Become My Friend Find friends »

Recent Comments

Re: “Letter From The Editor

38103's revenue management answer is right to a point; it explains the situation until COMPETITION enters the picture. Then competition impacts the revenue management math.

Simple explanation: Southwest Airline competes with Delta Nashville to Austin – so rates are lower from Nashville-Austin in order to compete. But there is no Southwest to compete with to or from Memphis, hence the higher prices.

This is a perfect example of "market-based pricing" – i.e., what the market will bear – as opposed to "cost-based pricing" – i.e., pricing based on the underlying cost structure. It's just easier to "see" (or at least imagine) the underlying cost here. Revenue management is COST BASED until competition enters the picture.

Two solutions:

1) Southwest in Memphis. The more routes they serve, the lower Delta fares will be on those routes.

2) Re-regulate the airline industry. (Good luck with that one.)

I don't like it any more than the rest of you: just building on 38103's accurate explanation of what's happening here.





2 likes, 0 dislikes
Posted by TackerDad on 05/17/2012 at 5:26 PM
ADVERTISEMENT

Collections

Favorite Places

  • None.
Find places »

Saved Events

  • Nada.
Find events »

Saved Stories

  • Nope.
Find stories »

Custom Lists

  • Zip.
ADVERTISEMENT
 
© 1996-2016

Contemporary Media
460 Tennessee Street, 2nd Floor | Memphis, TN 38103
Visit our other sites: Memphis Magazine | Memphis Parent | Inside Memphis Business
Powered by Foundation